Edgewater Hotel subsidy not worth it

So many things have gone wrong in downtown Madison it's understandable Mayor Dave Cieslewicz wants to make a big, bold statement by supporting the $109 million Edgewater Hotel renovation and expansion, including a public plaza overlooking Lake Mendota.

The central city has taken its share of lumps over the past decade. The mishandling of the design and operation of the Overture Center has had heartbreaking consequences. Unsold units in high-end condo projects now serve as a stark reminder that the much-celebrated "return to downtown living" was overblown. And one large-scale mixed-use proposal after another has collapsed - most notably Gary Gorman's Avenue 800 and the McGrath family's Union Corners.

Certainly, the recession hasn't helped. It's added an air of urgency, if not quite desperation, to get something built downtown. That may explain why nearly every business leader has fallen in behind the Edgewater expansion.

There's just one problem. A $16 million city subsidy - in the form of tax-increment financing - may turn out to be just one more mistake in a long decade of mistakes downtown.

Sure, the Edgewater remodeling should be welcomed and perhaps supported by a small subsidy. By any measure, the hotel is ripe for remaking into a hip, urban outpost like the Hotel Metro in Milwaukee or the Burnham in Chicago. But $16 million? Who's kidding who?

The Edgewater project simply doesn't justify that kind of public investment. The downtown and the city as a whole need a much smarter approach to building the economy. That vision still seems lacking.

What can one make of the city council's recent rejection of a tiny $300,000 TIF for Danisco USA, the Danish owner of the old Marschall dairy lab? The multinational corporation was considering a phased $50 million expansion here, but now may turn to its American branches in Waukesha and Rochester, N.Y. At stake were an estimated 179 new jobs - not just professional positions, but blue-collar jobs that pay a family-supporting hourly wage of $16 to $23.

How foolish of City Hall.

City leaders need to focus TIF on job creation. In the case of the central city, that means unlocking the largely dormant economic potential of the east rail corridor.How can the city capitalize on Google's beachhead on Blount Street? What can be done to advance the University Research Park's newly opened Metro Innovation Center in the old Marquip building?

Surprisingly, most of the discussion over the Edgewater project has concerned its design and appropriateness for the venerable Mansion Hill historic district. A better question: Just what the heck is the city getting for its $16 million?

I'm hard-pressed to see the payoff. The problem isn't just the disposable, minimum-wage nature of most hotel service jobs. The Edgewater is landlocked in a historic residential neighborhood. The opportunity for spin-off commercial development is practically nil.

Worse, the Edgewater doesn't reinforce the downtown's existing economic hubs. That beautiful escarpment at the end of Wisconsin Avenue isolates the Edgewater and puts it out of easy walking distance to the State Street retail district, the Capitol Square office market and, most critically, the Monona Terrace convention center.

In return for its Edgewater investment, the city would get a new public plaza overlooking Lake Mendota. One can certainly imagine how the Edgewater's bar and restaurant business will prosper from the proximity. But what about the downtown as a whole? Since when does a public plaza there qualify as a city priority?

It doesn't. Nearby James Madison Park already provides several thousand feet of lakefront access. The fabled Union Terrace and its postcard view of Lake Mendota can be found a few blocks away.

So what's going on? For city leaders nervous about the economy, the Edgewater project seems like low-hanging fruit ripe for the picking. It promises a big bump in the tax base and more room-tax revenue.

Moreover, the city would supposedly recoup its $16 million TIF investment within five years from the new taxes generated by the expansion. No wonder the project has garnered so much support, including that from a mayor whose brick-and-mortar accomplishments have been slight.

Here's the problem: The focus on the Edgewater will inevitably drain attention from more deserving projects. Ever mindful of its exalted Triple A bond rating, the city limits its annual TIF borrowing, meaning the Edgewater will claim the lion's share.

Similarly, city staff and committees only have so much time to hammer out policy. That was the hard, cruel lesson of the inclusionary zoning fiasco: So much effort was sucked up by endless IZ meetings that other affordable housing ideas (say, a land-bank approach) never saw the light of day.

A big Edgewater TIF could be another epic diversion from more productive strategies. Specifically, on the other side of the isthmus sits Law Park, where 100 years ago the famous urban planner John Nolen proposed a Grand Mall connecting the Capitol Square to a Great Esplanade along the shores of Lake Monona. If lake access is suddenly a city priority, here's where the city should be looking.

The impact on the Square and the Williamson Street gateway to the Marquette Neighborhood and the rail corridor could be transformative.

Ongoing work on a new downtown plan has generated two significant citizen proposals - from architect Doug Kozel and the JJR design firm - to achieve Nolen's historic goal of bringing the Capitol Square to the beckoning Lake Monona shoreline. Predating both is architect Kenton Peters' still intriguing proposal from 2001 to build a terraced park over John Nolen Drive.

Any of these plans have the potential for creating more economic synergy than the Edgewater expansion. Whether they get a serious hearing at City Hall is an open question.

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